BUSTAX : CH 1

What are the modes of acquiring ownership under Art. 712 of the Civil Code?

Occupation, intellectual creation, law, donation, tradition, contract, prescription, and succession.

According to Art. 712, how is ownership acquired?

By occupation, intellectual creation, law, donation, succession, certain contracts, tradition, and prescription.

Define Transfer Taxes.

Taxes imposed upon the gratuitous disposition of private properties or rights.

What is a Gratuitous Transfer?

A transfer that imposes no burden or consideration from the transferee or recipient.

Why is the transfer of ownership considered free in a gratuitous transfer?

Because of the absence of financial consideration; they are essentially donations.

What is an Onerous Transfer?

A transfer where the transferee gives consideration for the property or rights received.

What type of taxes are onerous transfers subject to?

Onerous transfers are subject to business taxes instead of transfer taxes.

What are the 2 types of transfer taxes?

1. Estate tax and 2. Donor's tax.

What is a donation mortis causa?

A gratuitous transfer taking effect at the time of the donor's death.

What is a donation inter vivos?

A gratuitous transfer taking effect during the lifetime of both donor and donee.

On what value are transfer taxes typically assessed?

Transfer taxes are typically assessed on the net value of the taxable assets transferred.

Define Succession under Art. 774 of the Civil Code.

Mode of acquisition transmitting property, rights, and obligations through death by will or law.

What does inheritance include according to Art. 776 of the Civil Code?

All property, rights, and obligations of a person not extinguished by death.

When are the rights to succession transmitted according to Art. 777 CC?

Rights are transmitted from the moment of death of the decedent.

How do heirs succeed to the property of the deceased ancestor?

Immediately at death, as if a deed was delivered before death.

What items are transmitted through succession?

Property, rights, and obligations.

What is the "Cut-off Period" for succession?

As of the date of death of the testator.

What is the limit on the amount of obligation an heir can inherit?

Not more than the combined value of the properties and rights inherited.

What is the nature of transfer tax?

Transfer tax is an excise tax or privilege tax, not a property tax.

What is the subject matter of a transfer tax?

The privilege of the transferor to gratuitously transfer property or rights.

Define transfer mortis causa.

A gratuitous transfer taking effect at the date of death of the transferor.

Define transfer inter vivos.

A gratuitous transfer taking effect during the lifetime of the donor and donee.

What law governs the imposition of estate tax?

The statute in force at the time of death of the decedent.

When does estate tax accrue?

At the date of death of the decedent.

What law governs succession itself in the Philippines?

Succession, excluding the tax aspect, is governed by the Civil Code.

What determines the kinds of succession under Art. 778 CC?

Whether or not a decedent left a "will" at the time of death.

What does it mean to die testate?

Dying with a will left at the time of death.

What does it mean to die intestate?

Dying without leaving a will.

Define Testamentary or testate succession.

Succession resulting from the designation of an heir made in a legal will.

Define Legal or intestate succession.

Succession effected by operation of law because no valid will exists.

Define Mixed succession.

A type of succession effected partly by "will" and partly by operation of law.

What are the causes of legal succession regarding the status of a will?

Dying without a will, a void will, or one that lost its validity.

What happens if a "Will" does not institute an heir?

It results in legal succession or intestacy.

What is the result of partial institution of an heir?

Mixed succession exists; intestacy takes place as to the undisposed portion.

What happens if an instituted heir is not capable of succeeding?

It results in legal succession or intestacy.

What is a suspensive condition?

A condition that must be fulfilled before an obligation arises.

Define Preterition.

Omission of compulsory heirs in the testator's will, annulling the institution of heir.

Define resolutory condition.

A condition that, upon fulfillment, terminates an already enforceable obligation.

List three other causes of legal succession.

Expiration of term, impossibility of compliance, or repudiation by the instituted heir.

Define the term "Decedent."

Person whose property is transmitted through succession, whether or not they left a will.

What is a "Testator"?

A decedent who left a will.

Who is an "Executor"?

Person designated in a will to carry out its provisions and fiduciary duties.

Who is an "Administrator"?

Person appointed by the court to manage the estate if no executor qualifies.

What is included in the Inheritance or Estate?

Property, rights, and obligations not extinguished by death, including accruals since death.

Which rights are not transmissible in succession?

Rights which are purely personal are extinguished by death and not transmissible.

Define "Heir" or "Successor."

Person called to succession by a will or by operation of law.

Define "Devisees" and "Legatees."

Persons to whom gifts of real and personal property are given by will.

What are Compulsory Heirs?

Heirs who succeed by force of law to a predetermined amount called legitime.

Can a testator deprive compulsory heirs of their legitime?

No, except through a properly effected disinheritance.

Who are Primary Compulsory Heirs?

Legitimate children and descendants who have precedence and exclude others.

Who are Secondary Compulsory Heirs?

Legitimate parents and ascendants who succeed only if primary heirs are absent.

Who are Concurring Compulsory Heirs?

Illegitimate children, descendants, and the surviving spouse who succeed with primary or secondary heirs.

Who are the Primary Compulsory Heirs?

Legitimate children and descendants, surviving spouse, and illegitimate children and their descendants.

Who are the Secondary Compulsory Heirs?

Legitimate parents and ascendants, and illegitimate parents with no other descendants.

When do legitimate parents and ascendants inherit?

They inherit only in default of legitimate children and their legitimate descendants.

When do illegitimate parents inherit?

They inherit only in default of legitimate children, descendants, and illegitimate children.

What is the status of brothers and sisters in succession?

They are neither compulsory heirs nor strangers, but they may be voluntary heirs.

Define Voluntary Heirs.

Heirs instituted by the testator to succeed to the free portion of the estate.

What is the Free Portion of the estate?

Value left after deducting the legitime of compulsory heirs, which the testator freely disposes.

Define Legal or Intestate Heirs.

Those who succeed by operation of law when no valid will exists.

How is the gross estate divided for succession purposes?

It is divided into two main categories: the legitime and the free portion.

Define Legitime.

Part of property reserved by law for compulsory heirs which the testator cannot dispose.

Can a testator deprive compulsory heirs of their legitime?

No, except by disinheritance properly effected.

Who can inherit from the Free Portion?

Anyone, including compulsory or voluntary heirs, as provided in the last will and testament.

How is the free portion distributed in the absence of a will?

It is distributed to intestate heirs based on the order of priority.

What is the 1st priority in the order of intestate succession?

Legitimate children or descendants.

What is the 2nd priority in the order of intestate succession?

Legitimate parents or ascendants.

What is the 3rd priority in the order of intestate succession?

Illegitimate children or descendants.

What is the 4th priority in the order of intestate succession?

Surviving spouse.

What is the 5th priority in the order of intestate succession?

Brothers and sisters, nephews and nieces.

What is the 6th priority in the order of intestate succession?

Other collateral relatives within the 5th degree.

What is the 7th priority in the order of intestate succession?

State or the government.

What rule governs the distribution of free portion in intestate succession?

The relative nearest in degree excludes the more distant ones.

Define Consanguinity.

Relation of persons descending from the same stock or common ancestors; known as blood relatives.

Define Lineal Consanguinity.

Relationship subsisting between persons where one is descended in a direct line from another.

Define Collateral Consanguinity.

Relationship between persons with same ancestors but not descending or ascending from each other.

How is proximity of relationship determined?

Determined by the number of generations, where each generation forms a degree.

What is the legitime of 1 Legitimate Child (LC) surviving alone?

1/2 of the estate.

What is the legitime of 1 LC and a Surviving Spouse (SS)?

1/2 for the LC and 1/4 for the SS.

What is the legitime for 2 or more LC and a SS?

1/2 for LC; SS gets a share equal to 1 LC.

How is the legitime shared between LC, SS, and Illegitimate Children (IC)?

LC 1/2; SS equal to 1 LC; IC 1/2 of 1 LC.

What is the legitime of Legitimate Parents or Ascendants (LPA) surviving alone?

1/2 of the estate.

What is the legitime of LPA and IC?

1/2 for the LPA and 1/4 for the IC.

What is the legitime of LPA and SS?

1/2 for the LPA and 1/4 for the SS.

What is the legitime of LPA, SS, and IC?

1/2 for LPA, 1/8 for SS, and 1/4 for IC.

What is the legitime of IC surviving alone?

1/2 of the estate, divided equally among the IC.

What is the legitime of IC and SS?

1/3 for IC and 1/3 for SS.

What is the legitime of a SS surviving alone?

1/2 of the estate.

When is the SS legitime reduced to 1/3?

Marriage in articulo mortis and deceased dies within 3 months after marriage.

What is the legitime of Illegitimate Parents (IP) surviving alone?

1/2 of the estate.

What happens to IP if there are any children?

IP are excluded from the inheritance.

What is the legitime of IP and SS?

1/4 for IP and 1/4 for SS.

Who is included in the term Illegitimate Parents (IP)?

Only parents of IC; grandparents and other ascendants are excluded.

Define a Will according to Art. 783 CC.

Act permitted by law to control estate disposition taking effect after death.

Why is making a will considered a strictly personal act?

It cannot be left to a third person, agent, or attorney's discretion.

Who are the persons prohibited by law from making a will?

Those below 18 years old and those not of sound mind during execution.

Who has the burden of proof regarding the testator's sound mind?

The person who opposes the probate of the will.

What must be proven if the testator was publicly insane 1 month before making a will?

That the testator made the will during a lucid interval.

Does supervening incapacity invalidate an effective will?

No, supervening incapacity does not invalidate an effective will.

Can a married woman make a will without her husband's consent?

Yes, she may make a will without consent or court authority.